How To Look Good To A Lender
Most of the businessmen are dreaming to expand their business especially if they think that they can be more successful and stable if they have at least expand and add more options to increase their business income.
One of the solutions that businessmen usually think of is getting a loan to a lender. Lenders are their turning point just in case they need back up on their business.
This is especially true when their business is really doing bad and need an additional capital to make it stable.
The problem with borrowing money with lenders, you need to have a good track record in terms of financial management on your business. You have to learn some tips that can help you convince lenders to borrow you money.
If you are planning to borrow money on a lender, you need to prepare and organize your business especially the financial statement which also includes your tax returns, list of your business’ receivables and payables, records of insurance, list of assets that can be use for a possible alternate value and cash flow in the past year. Having this records presented on the table of a lending officer will surely give him a good impression on how you organize your business.
You must also need to consider improving your loan to value ratio and for some banks you must have 3 to 1 or less. Some lenders are not that to strict with the range of the ratio, instead they usually look on how tough a business is even on critical situation of the economy on how they will stand firm and go on with their business along with the financial crisis and recession is on going. You must not over power or over control during those situations.
A lot of lenders usually look for those borrowers who can pay the interest and at the same time have the capability to service the debt. Most of them prefer those borrowers who can provide a regular monthly payment on interest and also can pay back the principal they borrowed. By showing them that you can pay your debt in full which include interest and principal, you will certainly get their trust and lend you money.
Lenders usually look for those who have a good track record in terms of paying debts. They do not want business that using the big part of their income in paying their debts; a ratio of less than forty percent is what they prefer. So if you are earning $10,000 per month, you must at least use $4,000 of it in paying your debt.
If you are planning to apply for a loan, make sure that you have clean up the mess on your credit history, this means that you have regularly pay your debt on time and have not miss any due payment on your record. But if in case that you have missed some payments on your record, you will then need a year to clean it up and present a good track record in terms of paying your debt.
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